PUTIN: 'Winter Is Coming'

Oil prices
plunged following Thursday's OPEC meeting in which the
cartel announced that it would not cut production.

Falling energy prices have put pressure on the budgets of the
world's major oil-producing nations like Russia.

However, Russian President Vladimir Putin doesn't seem too
worried.

"Winter is coming," he said Friday according Bloomberg
News. "I am sure the
market will come into balance again in the first quarter or
toward the middle of next year."

Putin is "sanguine,
suggesting falling oil won't force him to meet Western demands
that he curb his country's interference in Ukraine,"
reports Bloomberg News.

Putin's favorable view of winter isn't too surprising.
Traditionally, the colder it gets around the world, the better it
gets for the Russian economy as its trading partners import more
oil and natural gas.

"It is the power of colder weather that allows Russia, as the key
supplier of energy to Europe, to apply
leverage. That
leverage can take the form of higher prices, restricted volumes,
a combination of both, or negotiations that directly or
indirectly affect these additional costs," Cumberland Advisors
Chair David Kotok wrote earlier.

Russia provides
one-third of the natural gas that European
countries rely on both for heating their homes and running
industries. So if there's no natural gas, that's bad news for
Europe's economy.

One country in particular that Russia really benefits from
is Ukraine.
In 2013, more than half of the natural gas consumed by Ukraine
came from Russia.

And with Ukraine's
coal mines located exactly where the ongoing Russia-Ukraine
conflict is located, Ukraine will be forced to increasingly rely
on Russian gas.

But even if it's an extremely cold winter, the dropping oil
prices are still ominous for Russia.

"Russia in particular seems vulnerable" to the huge drop in oil
prices, Allan von Mehren, the chief analyst at Danske Bank A/S in
Copenhagen, told
Bloomberg News. "A big decline in the oil
price in 1997-98 was one factor causing pressure that eventually
led to Russian default in August 1998."

And on top of that, the country's economy is not in an ideal
situation.

Russia is still struggling following the sanctions imposed by the
US and the EU. Additionally, Russia's non-gold international
reserves have dropped to $370
billion, down from $457
billion in the start of the year.

And earlier Monday, the ruble crashed to an all-time low, down as
much as 8%
earlier in the day. (It has since slightly rebounded.)